The demand for alternative energy sources like wind power is growing around the world, but the number of ships necessary to deploy wind turbines is causing a logistics issue.
“The short supply of ships capable of deploying giant wind turbines at sea is becoming an even bigger problem as offshore wind ambitions grow,” a The Verge article says. “By 2024, demand for wind turbine installation vessels will likely outpace supply, according to a recent analysis by Norwegian firm Rystad Energy. That’s even sooner than a prediction the firm made back in 2020 when it said that the global fleet wouldn’t be enough to meet demand after 2025.”
Despite the challenges, the market demand could present a potential growth opportunity that investors could consider. Demand for wind energy will expand exponentially in the coming years, opening up avenues for ETFs that focus on wind energy.
“Ambitions for offshore wind are starting to take off around the globe as economies transition to clean energy,” the article says further. “The amount of offshore wind capacity added each year needs to more than quadruple by the end of the decade in order to meet the goals of the Paris Climate Agreement, according to the International Energy Agency. To reach that goal, the world is going to need more ships — and fast.”
Wind Behind This ETF’s Sails
One ETF to consider for this massive growth potential is the Global X Wind Energy ETF (WNDY). The fund seeks to provide investment results that correspond generally to the the Solactive Wind Energy Index.
As such, WNDY seeks to invest in companies positioned to benefit from the advancement of the global wind energy industry, which includes companies involved in wind energy technology production, the integration of wind into energy systems, and the development and manufacturing of turbines that harness energy from wind and convert it into electrical power. The fund comes with a 0.50% expense ratio, which can be offset with its 30-day SEC yield of 1.01% (as of February 2).
Features of WNDY include:
- High growth potential: Forecasts suggest that the global market for wind energy could reach $127 billion by 2027, double the market size in 2019.
- Advancing clean technologies: Wind-powered turbines produce zero direct emissions, meaning that broader adoption could result in reduced greenhouse gas emissions and improved air quality.
- Conscious approach: WNDY incorporates environmental, social, and governance (ESG) screens and follows ESG proxy voting guidelines to affect positive change alongside financial returns.
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